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Commission Agreement (Drafting)

A commission agreement form is a written agreement between a party who has goodsor services they want to sell and the second party will market and sell the goods or services. In commission agreement the first party promises to pay the other party a certain amount of money, called as a commission, for each sale made. A commission agreement should mention the percentage of commission or the amount as commission for each sale as well as when commissions will be paid out.

 

COMMISSION AGREEMENT

 

BASIC INFORMATION:

A commission agreement form is a written agreement between a party who has goods or services they want to sell and the second party will market and sell the goods or services. In commission agreement the first party promises to pay the other party a certain amount of money, called as a commission, for each sale made. A commission agreement should mention the percentage of commission or the amount as commission for each sale as well as when commissions will be paid out. It may be called as commission contract, commission sales agreement, sales commission agreement You should use a commission agreement if you are hiring a new employee to work under commission model.  You should also use this if you are being hired on a commission basis and your employer hasn’t provided you with a written agreement. Commission Agreement is a legal document that protects both parties.  

 

FEATURES OF COMMISSION AGREEMENT:

 

1.CONTACT INFORMATION– Commission agreement contains first name and last name of representative, name or company, address and phone details for both parties

2.AUTHORIZATION–In a Commission agreement anauthority is given to the salesperson to sell goods or services on the employer’s behalf.

3.COMMISSION STRUCTURE –Commission agreement lays out all the compensation details, commission rate.

4.DOCUMENTATION – Commission agreement instructs a salesperson to use company-approved documentation and forms for sales activities.

5.NON-COMPETE CLAUSE – A commission agreement may require a salesperson to promise not to represent competing brands and companies for a certain period of time.

6.NON-DISCLOSURE CLAUSE- Usually a commission agreement requires a representative to act in the best interest of the employer and keep business secrets and proprietary and confidential information protected at all times.

7.ACCEPTANCE -The parties accept the agreement by signing and dating it.

Documents


Passport Photo

Passport photo of all parties.


PAN Card

PAN card of all parties.


Aadhar Card

Aadhar card of all parties.


Utility Bill

Utility bill of Electricity or Telephone.


Address Proof

Valid Address Proof of all the parties.


Licence

Valid Driving Licence of all the parties.


Terms and Conditions

Terms and Conditions between the parties.


Other Documents

Other documents will be intimated through e-mail.

FAQ

A commission agreement form is a written agreement between two parties. The first party has goods or services they want to sell. The second party will market and sell the goods or services. The first party promises to pay the second party a certain amount of money, known as a commission, for each sale made. This agreement details the relationship between the two parties.

A commission is also an order for someone to do something and get paid

You can use this agreement if you are hiring a new employee in a commission position. You can use this agreement when you are being hired on a commission basis and your employer hasn’t provided you with a written agreement.

The main advantage of commission from an employee's point-of-view is that it enables high performing sales people to earn huge amounts. The main advantage to the employer is that the payroll cost is related to the value of business achieved rather than just the amount produced.

Employers benefit from paying a commission to their employees because it means that they only pay the employee if there is a sale. This eliminates the burden of paying employees for work that does not result in sales.

A commission agreement may have specific clauses as per the parties’ needs and requirements. Commission agreement must have many important clauses including but not limited to Non-compete clause, Commission structure, Fees, termination, exclusivity clause, Scope of work and Confidentiality clause.